Dow Chemical boosts plastics sales ahead of merger and split

Dow Chemical Co. first-quarter sales from plastics jumped, demonstrating continued strength in a business that will be the core of a new company following a historic merger with DuPont Co. and subsequent three-way split.

Revenue in the plastics unit rose 21 percent to $5 billion, Midland-based Dow said in a statement Thursday. The business has benefited this decade from U.S. fracking that has unleashed abundant natural-gas liquids, such as ethane, making the country among the most profitable places to manufacture ethylene and plastics such as polyethylene.

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CEO Andrew Liveris is expanding the unit's manufacturing capacity as he works toward closing the $79 billion merger with Wilmington, Del.-based DuPont in August. The deal won European regulatory approval last month, making U.S. clearance the last major hurdle. Within 18 months after closing, Dow and DuPont plan to split the company into three publicly traded companies. Dow's plastics business will serve as the anchor of the material science company.

Dow is spending $6 billion to boost plastics production along the U.S. Gulf Coast, with a newly constructed ethylene plant in Freeport, Texas, now starting up. In Saudi Arabia, the company's Sadara joint venture with Saudi Arabian Oil Co. has begun operations in the first of 26 manufacturing units.

Dow's adjusted earnings in the quarter rose to $1.04 a share, exceeding the 99-cent average of analyst estimates compiled by Bloomberg. Sales climbed to $13.2 billion, beating the $12.5 billion average estimate.

DuPont on Tuesday reported earnings that beat all analysts estimates as higher prices and sales volumes combined to boost revenue about 5 percent.